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Technology Stocks : PSFT - Fiscal 1998 - Discussion for the next year -- Ignore unavailable to you. Want to Upgrade?

To: Elmer who wrote (3888)	12/15/1998 11:55:00 AM
From: Chuzzlewit	Read Replies (1) \| Respond to of 4509

David, I disagree that options are a necessary evil. If investors stop voting yes for these things they will stop. If we continue to complain, then perhaps the appropriate accounting standards group will insist on at least making the cost visible. As I understand it, the term "fully diluted" implies that all options, regardless of whether they are in the money or not, are used for the computation of eps in the denominator. But the value of options granted is not used in the numerator! In other words, nowhere in the income statement is the cost of granting stock options listed as an expense item. (Nor will you find it on the balance sheet). The result is that the price of the stock has no effect on eps. It would if this were listed as an expense item and calculated according to, say, the Black-Scholes model. I pay no attention to TA indicators like volume, so I have no opinion on that. TTFN, CTC